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Media Release: CRTC Abandons Canadian Telephone Customers to Phone Companies’ Price Hikes

CRTC Abandons Canadian Telephone Customers to Phone Companies’ Price Hikes

Ottawa – Monday, April 30, 2007 – Canadians will be paying more for their local phone service beginning June 1, 2007 after the Canadian Radio-television and Telecommunications Commission (CRTC) took the lid off rates for local phone service in a decision today.

Michael Janigan, Executive Director and General Counsel with the Public Interest Advocacy Centre (PIAC), stated, “The CRTC has given Bell, TELUS and the other big phone companies the green light to raise your local telephone rates. We think the CRTC has abandoned Canadian telephone customers.”

Janigan noted that Industry Minister Maxime Bernier has promised that the new era of telecommunications deregulation would lower prices for Canadians: “This decision does the opposite.”

The CRTC faced intense phone company pressure to lift limits on local phone rates, after years of setting prices at levels Canadians can afford. “The CRTC will now permit phone companies to charge whatever they like for ‘optional services’ – but don’t be misled, this means useful services most Canadians take for granted, such as call display and voicemail.” Janigan noted.

While the decision places a cap of 5% or the rate of inflation per year, whichever is lower, for rural customers, prices likely will rise quickly to that level, added Janigan, “And don’t think they won’t go up by the maximum each year.” Urban customers theoretically have prices capped at current levels under the decision, however, companies now may “rate-deaverage” prices, meaning some urban customers may actually see significant price rises. In addition, if the company “bundles” its local phone service with other services like wireless, there is no limit on price.

The CRTC, in a surprise move, also allowed a doubling of payphone rates to 50 cents a call, up from 25 cents. John Lawford, PIAC legal counsel, noted “This is a 100% increase in rates that will hurt the most vulnerable of Canadians, who rely heavily on payphones to communicate. The CRTC did not indicate at the price cap hearings that it was seriously considering such a huge increase.”

PIAC is a non-profit organization that provides legal and research services on behalf of consumer interests, and, in particular, vulnerable consumer interests, concerning the provision of important public services.

For more information:

John Lawford
Counsel
Public Interest Advocacy Centre
ONE Nicholas Street, Suite 1204
Ottawa, Ontario
K1N 7B7
(613) 562-4002×25 (office)
(613) 447-8125 (mobile)
(613) 562-0007 (fax)

 

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